The carrier booked a net foreign currency loss of 721 million yuan ($117 million) for the half year compared with a net gain of 1.2 billion yuan the year before.

The earnings of China's airlines are sensitive to fluctuations in the currency, which depreciated more than 2 percent in the first half of the year. That made it costlier for the airlines to buy jet fuel and repay debt used to buy airplanes from Boeing and Airbus, which are paid for in dollars.

China's two other big state-owned carriers, China Southern Airlines and China Eastern Airlines, have warned investors to expect smaller profits because of yuan weakness when they release earnings on Friday.

Continue Reading Below

ADVERTISEMENT

Air China Ltd. said "enthusiasm for outbound travel remained high and the market for international passengers continued to be strong," although some regions and routes faced higher operating pressures. The company said that it was cutting capacity to Southeast Asian destinations in the wake of political instability in the region.